Although economic confidence is low at least we don't at the moment have sky high interest rates to escalate the rate of repossessions. Most of us who own our homes will have technically seen a loss of 25% of so in the last year but as we are not selling and and are not overmortgaged its thankfully not an issue for us.
The potential of negative equity is however a constant source of anxiety for people who have bought at the top of the market regardless of whether they are experiencing an actual loss; its a paper loss and that can be bad enough. I think FH is in a good position as the prices have always been reasonable enough to stimulate buying as other areas have become increasingly unaffordable.